Monetary Control, a specific form, dictated by the existence of commodity-money relations, for controlling the activities of socialist enterprises working on the principle of cost accounting. It is implemented, above all, through a plan that establishes the expenses to incomes ratio for the enterprise (the recoupment principle). Subject to control are also labour and means of production inputs, implementation of plans for volume and variety of output sold and profitability, the ratios between the social value of the products, their production costs and the money to be transferred into the enterprise 227 economic incentives funds, and the correspondence between the financial state and the course of plan implementation. Consequently, the collectives of enterprises are encouraged to do better in serving the interests of all the people by manufacturing products society needs, to maintain the planned socially-necessary labour inputs and work for their reduction, and increase the productivity of social labour. The financial system has a special role to play. The bank supervises the operations of every enterprise and its financial situation as evidenced by the state of its bank account, reports, and input-output ratios. The bank supervises the implementation of the production programme, the use of material resources and the wage fund, and surplus accumulation. When necessary, the bank urges the association (enterprise) and superior bodies to improve its work. The bank may impose special crediting and clearing regimes on enterprises that do not meet accumulation targets, incur unduly high losses, or do not take due care to maintain their circulating assets. The bank and financial bodies also employ monetary controls in collecting payments, granting short- and long-term loans, allocating funds for capital investment, and adding to circulating assets. Improvement of the economic mechanism calls for stricter monetary controls by the bank and expansion of its role as a mediator in settlements between suppliers and customers, and increasing the responsibility for settlements in the country’s economy. The role of bank credit in creation of circulating assets in enterprises also increases. Enterprises exercise mutual monetary control in the framework of economic agreements with suppliers of materials and buyers of output. Financial penalties such as fines and forfeits are applied for failure to honour agreement obligations. Monetary control is a major tool for consolidating cost accounting.